4 ms·

Although lots of UK companies won't be making any redundancies until the Coronavirus Job Retention Scheme ends. It's much easier to put UK workers on the 80% pa

Although lots of UK companies won't be making any redundancies until the Coronavirus Job Retention Scheme ends. It's much easier to put UK workers on the 80% pay furlough scheme than firing them. As soon as that money dries up expect companies to make lots of mass redundancies. It's going to be interesting to see the UK government's exit strategy from this crisis, immediately terminating the scheme before the economy has recovered will result in a huge increase in unemployment but keeping the scheme means productivity won't recover as people able to work productively are sat at home doing nothing.

9nGQluzmnq3M 7y ago
Keeping the scheme is also going to blow a massive hole in the budget. That said, Brexit will likely give them more room to fire up the pound printing presses to paper over the gap.
nicholassmith 7y ago
> but keeping the scheme means productivity won't recover as people able to work productively are sat at home doing nothing. Productivity will recover when businesses can use resources productively. It's either keep the scheme running until quarantine measures are reduced enough to allow businesses to start ramping back up and productivity increases again, or remove the scheme and push people to unemployment which is worse for productivity. If the government is daft enough to stop the scheme before the quarantine measures are reduced we're in for a shit-show of a decade.
- barbegal 7y ago
  This depends on which is worse for productivity: unemployment or furlough. I think in some cases furlough is worse for productivity as workers that could be working for another employer and have in-demand skills are sitting idle. In a free-market devoid of minimum wages and government packages, wages would be going down massively but fewer people would be doing nothing.
ajb 7y ago
For companies letting go more than 100 people, there is a mandatory consultation period of 45 days, and 30 days for more than 20. There was actually a story a few days ago that this scheme needed to be extended soon or some employers would be legally obliged to start that process. Not sure if that happened yet.
rwmj 7y ago
What's particularly interesting is that to make people redundant you have to notify them 6 weeks before. And 6 weeks before the end of the government guaranteed furlough period is ... today.
growlist 7y ago
My neighbour literally said to me over the fence the other day 'yay! furloughed!' with a thumbs up and a smile. I wasn't impressed.

9nGQluzmnq3M 7y ago

Keeping the scheme is also going to blow a massive hole in the budget. That said, Brexit will likely give them more room to fire up the pound printing presses to paper over the gap.

nicholassmith 7y ago

> but keeping the scheme means productivity won't recover as people able to work productively are sat at home doing nothing. Productivity will recover when businesses can use resources productively. It's either keep the scheme running until quarantine measures are reduced enough to allow businesses to start ramping back up and productivity increases again, or remove the scheme and push people to unemployment which is worse for productivity. If the government is daft enough to stop the scheme before the quarantine measures are reduced we're in for a shit-show of a decade.

barbegal 7y ago
This depends on which is worse for productivity: unemployment or furlough. I think in some cases furlough is worse for productivity as workers that could be working for another employer and have in-demand skills are sitting idle. In a free-market devoid of minimum wages and government packages, wages would be going down massively but fewer people would be doing nothing.

ajb 7y ago

For companies letting go more than 100 people, there is a mandatory consultation period of 45 days, and 30 days for more than 20. There was actually a story a few days ago that this scheme needed to be extended soon or some employers would be legally obliged to start that process. Not sure if that happened yet.

rwmj 7y ago

What's particularly interesting is that to make people redundant you have to notify them 6 weeks before. And 6 weeks before the end of the government guaranteed furlough period is ... today.

growlist 7y ago

My neighbour literally said to me over the fence the other day 'yay! furloughed!' with a thumbs up and a smile. I wasn't impressed.